China's fuel oil imports in November plunged 29.7% year on year to 1.46 million mt, General Administration of Customs data released Friday showed. The total was also down 12.4% from October.
The volume refers to fuel oil classified as No. 5-7 by China's customs department.
Venezuela remained China's largest supplier of fuel oil in November, with imports totaling around 343,492 mt, although the volume was down 39% year on year and down 9.9% from October.
State-owned oil trading company Chinaoil, the major importer of Venezuelan oil, imported one VLCC of Venezuelan straight-run 380 CST high sulfur fuel oil in mid-November, according to Platts shipping fixtures.
"The customs data sometimes not match with the volume we imported in the month as the cargoes we brought into China are mostly stored in bonded storage tanks first, then our customers declare the volume they need at customs," a Chinaoil source said.
Malaysia became the second-largest supplier of fuel oil to China in November for the first time in 2013, with its shipments surging 83.6% month on month and rising 63.1% year on year to 250,818 mt.
Malaysian blended 180 CST low sulfur fuel oil is mainly used as feedstock in catalytic cracking units at independent refineries, a refinery source said.
"The supply of imported straight-run fuel oil declined in November, which is believed to have encouraged the import of Malaysian fuel oil," the source said.
China's imports of Russian straight-run 180 CST fuel oil -- mainly M100 -- fell 3.6% month on month to 196,411 mt in November, and plunged 71.4% year on year, the data showed.
"Russia's supply of M100 declined this year, especially in winter," a trader said, noting the Russian ports of Vanino and Nakhodka have been icebound since November.
Japan's demand for low and middle sulfur fuel oil has increased in recent months, which was likely attracting M100 supply from Russia, the trader added.
Singapore was China's third largest supplier of fuel oil in November at 213,700 mt, down 30.5% month on month and up 45.1% year on year.
"The supply of 380 CST high sulfur fuel oil has been tight in Asia since November, which resulted in less imports of the grade from both Singapore and South Korea," another trader said.
Imports from South Korea totaled 134,165 mt in November, down 33.7% month on month and down 51.1% on year, the data showed.
Over the first 11 months of the year, China's fuel oil imports fell 4.3% year on year to 21.4 million mt. Russia, Venezuela and Singapore remained the top suppliers over the period, although volumes from the first two countries fell 24.6% and 22.8%, respectively, year on year, to 5.2 million mt and 3.6 million mt. FUEL OIL AS TEAPOT FEEDSTOCK FALLS FURTHER
Imported fuel oil in China is mainly used as a feedstock in so-called teapot refineries -- small independently owned units that typically have less than 5 million mt/year of capacity and limited secondary processing units.
Shandong province in eastern China has the highest concentration of teapot refineries, with refining capacity totaling about 112 million mt/year (2.25 million b/d), according to Beijing-based energy information provider JYD Commodities Hub.
These refineries can crack crude oil and imported fuel oil. The refineries' product slate comprises mostly gasoil and gasoline, which are sold in the domestic market.
In its survey of 35 teapot refineries released earlier this month, JYD said the refineries consumed 4.17 million mt of feedstock, of which 3.56 million mt was crude oil and 610,200 mt imported fuel oil.
Crude oil accounted for about 85% of the total feedstock the refineries processed in November, up from 62% in October. Fuel oil accounted for 15% of the total, down from 38% in October, according to the JYD survey.
Teapot refineries' consumption of imported fuel oil plunged 59% month on month in November, with steep declines in low sulfur 180 CST fuel oil and Venezuelan straight-run 380 CST high sulfur fuel oil, the survey showed.
"The teapot refineries in Shandong have consumed more and more crude oil, which is expected to further squeeze the market share of imported fuel oil in future," a market source said earlier.
